| Summary: | Research purpose. This paper has established the index of the cycle of money. The index shows the level of the appropriately structured economy. According to the theory of the cycle of money, it is examined if an amount of money is recycled in the economy a lot of times or this amount of money is lost from an economy to other economies or banks abroad, because of inadequate structure of the economy of the country, then the purpose of the paper is to show an application of the case cycle of money, here in the case of Latvia. Therefore, this work aims to clarify how the theory of the cycle of money works to a real case scenario, and in general, how the cycle of money applies to an economy. Moreover, the index of the cycle of money shows how an economy could counteract to an economic crisis and how well-structured it is.
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